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How to Start Investing in Bullion Coins

Paul Montgomery, EVP of Purchasing and Merchandising at APMEX, was on our Facebook page taking questions about investing in bullion coins. Below is a recap of some of the questions he received. Like us on Facebook to stay informed about future chats, promotional offers and sweepstakes.

Q: Can you tell us the difference between major bullion coins?

PM: Let’s start with gold. What we consider the major bullion coins here in the United States is different than what might be the case in Canada or Europe. For instance in the US, the most commonly traded bullion coin is the US American Eagle. The second is the Canadian Maple Leaf, third the Krugerrand and finally the Austrian Philharmonic. Each of these coins is a one oz coins which means that their base value is exactly the same. That said there are various differences in the designs which are all pleasing and subject to the “eye of the beholder” test. At the root they are all exactly the same value. The premiums to the metal do vary from coin to coin.

Q: What drives the relative price of bullion coins?

PM: It’s really as simple as supply and demand. Each of the different products has a finite available supply at any given moment in time. They are all being produced on a regular basis so the key word in my sentence is “available” supply. For example, if the demand for Austrian Philharmonics rises to the point where the available supply can’t meet the demand, the premium to spot will rise until the supply/demand factors align. It’s all about how many can we get and how many do you want!

Q: What is the best option to avoid the premiums? Or rather, what are the lowest prices over spot for silver?

PM: I am a huge advocate of our own APMEX branded products, but really any privately made bullion coins from a credible source are going to offer the lowest premium to melt. Our APMEX rounds are stamped on the same silver blanks that the US Mint uses to make American Eagles…neat little trivia question.